Global investment firm KKR, together with Singtel, is spearheading a consortium to invest $1.3 billion in ST Telemedia Global Data Centres (STT GDC). This marks the largest digital infrastructure investment in Southeast Asia for 2024. As per the agreement, the consortium's initial investment of $1.3 billion comprises redeemable preference shares (RPS) paired with detachable warrants. Upon full exercise of the warrants, an additional $920 million will be invested.
KKR has disclosed that it is investing through its Asia Pacific Infrastructure Investors II Fund, marking the firm's most recent venture into digital infrastructure in Southeast Asia and worldwide. This initiative builds on a previous commitment made at the Indo-Pacific Partnership for Prosperity aimed at enhancing infrastructure in the Indo-Pacific region. KKR's prior investments in Southeast Asian digital infrastructure include Nxera, Pinnacle Towers, and OMS Group.
David Luboff, who co-leads KKR’s Asia Pacific operations and serves as head of infrastructure for the region, highlighted the crucial role of data centers as a foundational element of digital infrastructure supporting the expansion of digital economies and essential industries worldwide. “Our investment in STT GDC is a rare opportunity to support the growth of a leading data centre platform with a terrific track record of growth and significant potential, whilst deepening our existing collaboration with Singtel”, he added.
Singtel's group financial officer, Arthur Lang, expressed that the telecommunications company views digital infrastructure, especially data centers, as an attractive investment due to their status as a "growth asset." He attributed the sector's growth to the rapid adoption of digitalization and artificial intelligence (AI) on a global scale. “Given our joint expertise in digital infrastructure, we are pleased to participate in this fundraising with KKR, deepening our relationship since its investment in our regional data centre arm Nxera last September”, he stated.
Additionally revealed was that the consortium was chosen through an "independent competitive process" by STT GDC and its parent company, ST Telemedia (STT). Factors taken into account included the consortium's combined experience and proven track record, financial robustness, and proposed operational strategy. The investment funds will be allocated to strengthen STT GDC's market presence and facilitate its ongoing global expansion and growth initiatives through both organic and strategic acquisitions. Post-transaction, STT will retain its majority ownership of STT GDC.
Lopez also explained that the industry is undergoing “unprecedented cloud and AI-led growth” and the partnership with the consortium would act as a “significant catalyst” for STT GDC’s next phase of expansion in the digital infrastructure industry. Meanwhile, president and group CEO of STT Stephen Miller celebrated the partnership and affirmed that the company has “steadfastly supported” STT GDC’s evolution and growth since its inception.